Auditor: Covered Calif. working

inspector-glassThe health insurance market Covered California has made “great strides” in preparing for the Oct. 1 start of business, but “critical work and some concerns remain,” according to the state auditor.

The individual insurance exchange, a nationwide leader in enactment of the Affordable Care Act, was nonetheless added to the auditor’s list of “high‐risk issues” for state government.

The success and sustainability of the Affordable Care Act in California is “will largely depend on the effectiveness of the enrollment processes that Covered California puts in place,” state auditor Elaine Howle said in the report to the governor and General Assembly dated July 18.

Widespread enrollment by the uninsured is considered critical to the success of Covered California and to Obamacare in general. Adults are required to buy health insurance in 2014, or face a series of increasing fines. The first year’s fines, however, are relatively small.

The California auditor found that “future enrollment is unpredictable and is based on market factors outside of Covered California’s control. Consequently, enrollment in the exchange and the financial sustainability of Covered California will need to be monitored.”

Citing the “looming deadline” of early October, the auditor said the exchange is “on schedule to complete the key tasks related to call centers that will serve consumers — those in Contra Costa, Fresno and Sacramento counties. Problems remaining include leases for the centers themselves and the hiring of staffers.

“While Covered California has expressed confidence that it will open the centers in time to support enrollment, there is a risk that Covered California may face significant challenges in adequately staffing its call centers in time to meet demand,” the auditor said.

The news comes days after state health analysts signed off on the proposed rates and plans for California’s health insurance exchange.

Covered California’s outreach plans — education, marketing — “appear more than adequate,” the audit found. “Covered California appears to have engaged in a logical and deliberate process when developing its marketing plan.”

The auditor praised the exchange’s openness in contract negotiations, despite a state law allowing it “unique authority” to keep details of its pacts confidential.” (The contracts are exempt from disclosure under the California Public Records Act.) The auditor praised Covered California for publicly releasing many of its contracts, including their financial benefits to the provider.

Here are the auditor’s general concluding recommendations:

Transparency: “Covered California’s board should formally adopt a policy to retain confidentiality only for contracts, contract amendments, and payment rates that are necessary to protect Covered California’s interests in future contract negotiations.”

Qualified health plans: “Covered California should develop a plan and procedures for monitoring, recertification, and decertification” of the plans.

Outreach: The health insurance exchange “should track the effect on enrollment figures of its planned outreach and marketing activities and of its (enroller) assister program.”

Financial stability: The exchange should conduct “regular reviews of enrollment, costs and revenue, and make prompt adjustments to its financial sustainability plan as necessary.”

Read the full auditor’s report on Covered California (PDF)

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